Itochu (ITOCY) AI Stock Analysis

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Itochu

(OTC:ITOCY)

Rating:78Outperform

Price Target:

$134.00

▲(13.77% Upside)

Itochu's strong financial performance and bullish technical indicators are the primary drivers of its stock score. The company's solid revenue growth and profitability, combined with positive market momentum, position it well in the market. However, the valuation is only moderately attractive, and attention should be paid to managing cash flow growth.

Itochu (ITOCY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$85.20B

Dividend Yield2.26%

Average Volume (3M)1.83K

Price to Earnings (P/E)13.1

Beta (1Y)0.50

Revenue Growth2.50%

EPS Growth22.24%

CountryUS

Employees113,733

SectorIndustrials

Sector Strength73

IndustryConglomerates

Share Statistics

EPS (TTM)2.71

Shares Outstanding792,445,000

10 Day Avg. Volume1,213

30 Day Avg. Volume1,829

Financial Highlights & Ratios

PEG Ratio0.00

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.24

Enterprise Value/Revenue<0.01

Enterprise Value/Gross Profit0.04

Enterprise Value/Ebitda0.10

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Itochu Business Overview & Revenue Model

Company DescriptionITOCHU Corporation engages in trading and importing/exporting various products worldwide. The company's Textile segment produces and sells fiber and garment materials, textiles fabrics, apparel, and industrial materials; and imports lifestyle brands, fashion accessories, and garments in various areas, such as luxury, casual, and sports. Its Machinery segment provides engineering, procurement, and construction services; operates water and environmental, infrastructure, renewable energy, oil and gas, petrochemical, and independent power producer projects and plants; sells and leases aircraft and related equipment; sells automobiles, construction machinery, electronic systems, industrial machinery, and medical devices; and owns and charters ships. The company's Metals & Minerals segment engages in mining and trading of iron ore, coal, uranium, base metals, and minor metals; trading in non-ferrous metal materials; and processing and trading in steel products. Its Energy & Chemicals segment trades in crude oil, petroleum products, LPG, LNG, natural gas, hydrogen, organic and inorganic chemicals, synthetic resins, household goods, fine chemicals, pharmaceuticals, and electronic materials, as well as generates and trades in power. The company's Food segment produces, distributes, and retails food products. Its General Products & Realty segment produces and sells paper, pulp, natural rubber, tire, and wood products and materials; develops and operates real estate properties, such as housing, logistics facilities, and other projects; and offers logistics services. The company's ICT & Financial Business segment offers IT solutions, Internet related and venture capital services, mobile telephone equipment and services, BPO, broadcasting and communications, entertainment and content services, outsourcing services for healthcare and preventive medicine, and financial and insurance brokerage services. The company was founded in 1858 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyItochu generates revenue through multiple streams, primarily by acting as an intermediary in international trade, selling products sourced from manufacturers to customers worldwide. The company earns income from its trading operations, which include the import and export of goods across various sectors. Additionally, Itochu invests in joint ventures and partnerships that allow it to participate in resource development, such as energy and mining projects. Significant revenue also comes from its retail operations, where it sells consumer goods directly to the public. The company benefits from strategic alliances with both domestic and international firms, enhancing its product offerings and market position. Furthermore, Itochu's investment activities, including private equity and venture capital, contribute to its earnings, leveraging its extensive network to identify and capitalize on lucrative opportunities.

Itochu Earnings Call Summary

Earnings Call Date:Aug 01, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 05, 2025

Earnings Call Sentiment Positive

The earnings call highlighted several positive developments, including an increase in consolidated net profit and record-setting cash flows, alongside strong performances in specific sectors like Textile and Food. However, challenges such as declines in Metals & Minerals and Energy & Chemicals profits were noted. Despite these challenges, the overall sentiment is positive due to the significant gains and strategic investments being made.

Q2-2025 Updates

Positive Updates

Increase in Consolidated Net Profit

Consolidated net profit increased by 6% or ¥25.5 billion year-on-year to ¥438.4 billion, achieving 50% of the annual forecast.

Strong Core Operating Cash Flows

Core operating cash flows exceeded ¥500 billion for the first time in a half-year result, reaching ¥513 billion, setting an all-time high.

Textile and Food Sector Growth

Textile, Food, and other sectors saw an increase in profit, with Textile driven by inbound consumption and stable performance in sports, and Food benefiting from a turnaround in the pork business.

Record Operating Cash Flows

Operating cash flows reached ¥578.6 billion, setting the record high, driven by stable performance from operating revenues and dividends received.

Increase in Shareholder Returns

For FYE 2025, the total payout ratio is aimed at 50%, with a dividend per share of ¥200, an increase of ¥40 from the previous year, marking the 10th consecutive year of dividend increases.

Negative Updates

Decline in Metals & Minerals Profit

Metals & Minerals saw a decrease in profit despite increased dividends from Brazilian iron ore business due to deteriorating profitability in Marubeni Itochu Steel's North American business.

Energy & Chemicals Profit Decrease

Profit in Energy & Chemicals decreased significantly due to the absence of large extraordinary gain from the previous fiscal year's power and environmental solution.

General Products & Realty Profit Decline

Profit was down in General Products & Realty due to the decrease in North American construction materials business affected by higher costs and market downturn.

Company Guidance

In the call, Itochu Corporation's President, Keita Ishii, provided guidance on various financial metrics for the first half of FYE2025. The consolidated net profit increased by 6% year-on-year to ¥438.4 billion, achieving 50% of the annual forecast. Core profit reached ¥396 billion, marking the second-highest profit level after FYE2023, with a 3% year-on-year growth across sectors including Textile, Chemicals, and Food. Core operating cash flows exceeded ¥500 billion for the first time in a half-year, reaching ¥513 billion, setting an all-time high. The overall annual forecast remains unchanged at ¥880 billion, despite revisions in sector forecasts: Textile is expected to increase by ¥40 billion, while Metals & Minerals are revised down by ¥40 billion. Total shareholders' equity rose by ¥170 billion to ¥5.6 trillion, and the company plans to maintain a total payout ratio of 50%, with a dividend per share of ¥200 and the largest-ever share buybacks of ¥150 billion.

Itochu Financial Statement Overview

Summary

Itochu exhibits strong financial health with consistent revenue growth and profitability. The balance sheet shows improved leverage, though debt levels are still significant. Cash flow generation is solid, but the recent decline in free cash flow growth warrants attention. Overall, the company is well-positioned but should focus on enhancing operational efficiency and managing cash flow growth.

Income Statement

Very Positive

Itochu has demonstrated solid revenue growth with a 21.8% increase in the latest year, indicating strong market performance. The gross profit margin is healthy, and the net profit margin has improved over the years, reflecting efficient cost management. However, the slight decline in EBIT margin suggests potential pressure on operational efficiency.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved, indicating better leverage management, though it remains relatively high. The return on equity is strong, showcasing effective use of shareholder funds. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Positive

Operating cash flow remains robust, but free cash flow has seen a decline, which could impact future investments. The free cash flow to net income ratio is strong, indicating good cash generation relative to profits. However, the negative free cash flow growth rate is a concern.

Breakdown	TTM	Dec 2025	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.68T	14.72T	14.03T	13.95T	12.29T	10.36T
Gross Profit	2.38T	2.38T	2.23T	2.13T	1.94T	1.78T
EBITDA	1.09T	1.71T	1.29T	1.25T	1.28T	968.57B
Net Income	957.59B	880.25B	801.77B	800.52B	820.27B	401.43B
Balance Sheet
Total Assets	15.18T	15.13T	14.49T	13.11T	12.15T	11.18T
Cash, Cash Equivalents and Short-Term Investments	620.32B	636.91B	689.06B	688.80B	724.83B	598.88B
Total Debt	4.62T	4.62T	4.40T	4.01T	3.92T	4.22T
Total Liabilities	8.90T	8.84T	8.50T	7.65T	7.39T	7.31T
Stockholders Equity	5.74T	5.76T	5.43T	4.82T	4.20T	3.32T
Cash Flow
Free Cash Flow	810.50B	769.81B	775.56B	743.98B	644.02B	730.88B
Operating Cash Flow	1.04T	997.28B	978.11B	938.06B	801.16B	895.90B
Investing Cash Flow	-466.74B	-516.27B	-205.99B	-453.81B	38.64B	-207.30B
Financing Cash Flow	-607.73B	-525.00B	-413.33B	-500.08B	-846.71B	-728.77B

Itochu Technical Analysis

Technical Analysis Sentiment

Positive

Last Price117.78

Price Trends

50DMA

107.96

Positive

100DMA

105.03

Positive

200DMA

99.36

Positive

Market Momentum

MACD

2.74

Negative

RSI

67.51

Neutral

STOCH

98.29

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITOCY, the sentiment is Positive. The current price of 117.78 is above the 20-day moving average (MA) of 112.59, above the 50-day MA of 107.96, and above the 200-day MA of 99.36, indicating a bullish trend. The MACD of 2.74 indicates Negative momentum. The RSI at 67.51 is Neutral, neither overbought nor oversold. The STOCH value of 98.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ITOCY.

Itochu Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITOCY	78 Outperform	$85.20B	13.10	17.06%	2.26%	2.50%	22.24%
HON	74 Outperform	$136.34B	24.42	34.60%	2.11%	7.16%	0.21%
Sector *	63 Neutral	$10.73B	15.32	7.37%	2.01%	2.86%	-14.57%
MMM	58 Neutral	$82.72B	21.60	96.00%	1.89%	-19.56%	325.26%

* Industrials Sector Average

Performance Comparison

ITOCY

Itochu

117.78

11.66

10.99%

MMM

153.08

25.53

20.02%

HON

Honeywell International

214.20

17.34

8.81%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 10, 2025